Brown-Forman Corporation (BF-B) Intrinsic Value & DCF Valuation
Beverages - Wineries & Distilleries · NYSE
Current Price
$27.01
Intrinsic Value
$26.65
-1.4% margin of safety
What Is Brown-Forman Corporation's Intrinsic Value?
As of 2026-06-12, our base-case DCF model estimates the intrinsic value of Brown-Forman Corporation (BF-B) at $26.65 per share, compared with a market price of $27.01, a margin of safety of -1.4%. The base case assumes 2.6% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $20.79 to $33.46. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Brown-Forman Corporation (BF-B) Undervalued?
At $27.01, BF-B trades about 1.4% above our base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Iconic Brand Equity
Brown-Forman owns globally recognized brands like Jack Daniel's. This strong brand loyalty allows for premium pricing and sustained demand, even in challenging economic conditions.
↑Distribution Network Strength
The company possesses an extensive and established global distribution network. This infrastructure is difficult for competitors to replicate, ensuring broad market access and efficient product delivery.
↑Pricing Power & Innovation
Recent performance highlights successful pricing strategies and innovation, such as Jack Daniel's Tennessee Blackberry. This demonstrates an ability to adapt and drive revenue through product development and strategic pricing.
INVESTMENT RISKS
↓Discretionary Spending Pressures
Weakening discretionary spending in the U.S. poses a significant risk. This can lead to reduced consumer demand for premium spirits, impacting sales volumes and revenue growth.
↓Struggling Spirits Market
The broader spirits market faces headwinds, with expectations for flat sales. This indicates a challenging operating environment where market share gains may be difficult to achieve.
↓Muted Long-Term Growth
Structural headwinds suggest muted long-term growth prospects. This could limit the company's ability to expand its business significantly beyond its current strong brands.
Base case
BF-B base case valuation
Intrinsic Value
$26.65
Margin of safety
-1.4%
Expected annual return
-0.3%
Base case assumptions: 2.6% annual growth, 10.0% discount rate, 14x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BF-B valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Brown-Forman Corporation respond.
Open DCF Calculator for BF-BCompany Overview
Brown-Forman Corporation, along with its subsidiaries, operates globally within the alcoholic beverage industry. The company is actively involved in the production, distillation, bottling, international trade (importing and exporting), marketing, and sale of a diverse portfolio of alcoholic products. Its extensive offerings encompass a wide variety of spirits, wines, and whiskey products, including specialty whiskey spirits and flavored whiskey liqueurs. The range also features convenient ready-to-drink and ready-to-pour options, pre-mixed cocktails, vodkas, tequilas, champagnes, brandy, bourbons, and other liqueurs. These beverages are primarily marketed under prominent brands such as Jack Daniel's, Reserve, Old Forester, Coopers' Craft, Herradura, el Jimador, New Mix, Korbel Champagnes, Sonoma-Cutrer, Finlandia, GlenDronach, Benriach, Glenglassaugh, Chambord, Slane, and Fords Gin. Beyond beverage sales, Brown-Forman also engages in the sale of used barrels, bulk whiskey, and wine, in addition to offering contract bottling services. The company's distribution model involves reaching retail customers and end consumers through independent distributors or state governments, while directly supplying retailers, wholesalers, and provincial governments. With a history dating back to its founding in 1870, Brown-Forman Corporation is headquartered in Louisville, Kentucky, and conducts substantial operations across the United States, Germany, Australia, the United Kingdom, Mexico, and numerous other international markets.
Financial Metrics — BF-B Stock Valuation Data
Revenue/Share (TTM)
$8.56
FCF/Share (TTM)
$1.95
ROIC (TTM)
13.7%
ROE (TTM)
17.6%
P/FCF
14.1x
EV/EBITDA
13.7x
FCF Yield
7.09%
Debt/Equity
0.54x
Based on trailing twelve-month data, BF-B shows a free cash flow per share of $1.95 and a ROIC of 13.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 14.1x and FCF yield of 7.09% are important context metrics when evaluating BF-B's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of BF-B?
Brown-Forman Corporation currently generates $1.95 in free cash flow per share. At the current price of $27.01, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is BF-B undervalued?
BF-B trades at a P/FCF ratio of 14.1x with a free cash flow yield of 7.09%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether BF-B is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value BF-B stock using DCF?
To perform a DCF valuation on Brown-Forman Corporation: (1) Start with the trailing free cash flow per share ($1.95) as the base, (2) project future FCF growth over 5-10 years based on Beverages - Wineries & Distilleries industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting BF-B's risk profile — with a debt-to-equity of 0.54x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to BF-B?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Brown-Forman Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Beverages - Wineries & Distilleries trends, then discounting those amounts to today's dollars. BF-B's ROIC of 13.7% shows moderate capital returns.
How does WACC affect BF-B stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For BF-B, with a debt-to-equity ratio of 0.54x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.7x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See BF-B PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value BF-B with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.